New Study Finds Immigrants Pay More in Private Insurance Premiums Than They Receive In Benefits

In the first study to look at immigrants’ role in financing private health insurance, findings contradict assertions that people born in the US are systematically subsidizing the medical care of immigrants.

Published in the October edition of Health Affairs, findings from our study using nationally representative data show that immigrants heavily subsidize private insurance of US-born enrollees and boost profits of private insurers.

As we presented at AcademyHealth’s Annual Research Meeting in June of 2018, we found immigrants’ premiums totaled $88.7 billion in 2014, while private insurers’ expenditures for their care totaled $64.0 billion (detailed in the image below). Hence, immigrants (and their employers) paid $24.7 billion more in premiums than insurers paid for immigrants’ care.

Image pulled from the study in Health Affairs*

For many immigrants, such as undocumented immigrants or those residing legally in the US for fewer than five years, private insurance is often the only coverage option. Because immigrants are mostly working-age adults with high rates of labor force participation, many enroll in job-based coverage.

Our study was the first to look at immigrants' role in financing private health insurance. We used data from the Medical Expenditure Panel Survey and the Census Bureau’s Current Population Survey to determine immigrants' premium contributions to private insurance, including premiums that employers paid on their behalf. Then we tabulated all payments that private insurers made to doctors, hospitals, and other providers for immigrants' care to determine whether immigrants paid more or less into private insurance than they used. Undocumented immigrants, who generally use little medical care, generated the largest surplus at $1,445 per enrollee. The surplus contributed by immigrants offset a per enrollee deficit among US born individuals of $163. Previous research shows that insurance outlays for immigrants are low because they are relatively young and healthy, and often face linguistic and other barriers to care.

Almost every day I see immigrant patients who avoid seeking the care they need to stay healthy. Political leaders have created a climate of fear by blaming immigrants for driving up health care costs. However, this study and our prior research shows that by paying more into the system than they receive, immigrants actually subsidize both private insurance and Medicare for US-born citizens.

Much of the debate over the financing of immigrants’ medical care has centered on uncompensated care and Medicaid, but a more complete understanding requires an examination of private health insurance and Medicare. Our findings contradict assertions that people born in the US are systematically subsidizing the medical care of immigrants, particularly those who are undocumented. Indeed, these findings suggest that policies curtailing immigration could reduce the numbers of “actuarially desirable” people with private insurance, thereby weakening the risk pool.